Businesses are constantly challenged by the ever-evolving landscape of labor and employment law, with new legislation and judicial developments occurring almost daily fueling a seemingly never-ending stream of litigation. For companies operating in multiple states, complying with this patchwork of federal, state, and local laws and developments can be daunting. Knowing these issues are a top concern for management and in-house counsel, Morrison Foerster keeps pace with this rapidly evolving landscape. MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues covering key judicial, litigation and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Andrew Turnbull represents companies on a broad range of labor and employment litigation and counseling matters. He has successfully defended clients in complex employment litigation before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, including advising on all aspects of OFCCP compliance, creating and implementing affirmative action plans, defending OFCCP audits and onsite investigations, conducting mock pay equity audits, drafting and developing business ethics policies and programs, and complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act.

Andrew Turnbull

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The “Preventative Duty”: New Law Places Active Duty on Employers in the UK to Prevent Sexual Harassment in the Workplace

Good News for Employers: Texas Court Blocks FTC’s Non-Compete Ban

Potential Exceptions Under FTC’s Non-Compete Ban

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Employers in England, Scotland and Wales are now required to take reasonable steps to prevent sexual harassment of their employees in the course of their employment. New legislation, the Worker Protection (Amendment of Equality Act 2010) Act 2023, which came into effect on 26 October 2024, creates a new pro-active, preventative duty on employers and provides for enhanced compensation for employees if their employer is found by an employment tribunal to have breached this duty. Employers should now take steps to ensure that they can comply with this preventative duty.In this client alert, we highlight…<a href="#section1" target="_self">1. The new law</a><a href="#section2" target="_self">2. Enforcement</a><a href="#section3" target="_self">3. What should employers do now?</a><a href="#section4" target="_self">4. What Next?</a>The new lawSexual Harassment is defined in the UK Equality Act 2010 as any “unwanted conduct of a sexual nature, which has the purpose or effect of violating an individual’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for them”. Before the preventative duty came into force, an employer facing claims of sexual harassment could potentially rely on the “statutory defence” that it had taken “all reasonable steps” to prevent sexual harassment from taking place. Under the new law, however, employers are now under a positive duty to prevent sexual harassment from occurring in the first place; as the Equality and Human Rights Commission (EHRC) puts it in its <a href="https://www.equalityhumanrights.com/employer-8-step-guide-preventing-sexual-harassment-work" target="_blank">Employer 8-step guide: Preventing sexual harassment at work</a>, “This [new law] is called the preventative duty. If employers do not comply with it, they are breaking the law”.EnforcementThe preventative duty:<ul><li>Applies to sexual harassment by third parties such as customers, clients or suppliers, in addition to sexual harassment by colleagues;</li><li>Gives the EHRC the power to take enforcement action directly against employers, including to investigate an employer, issue an “unlawful act” notice, and require employers to prevent unlawful acts in future through a binding agreement or a court injunction; and</li><li>Gives the preventative duty added “teeth” by giving employment tribunals the power to award a “compensation uplift” in a successful discrimination claim of up to 25% of any amount awarded to an employee if an employer is found to have contravened its duty.</li></ul>It is important to note that the duty applies to sexual harassment and not to other forms of harassment (e.g., on the grounds of disability, age, race, religion, or sexual orientation). That said, employers should, of course, be taking steps to eliminate all forms of harassment in the workplace, and so, as best practice, employers should consider the preventative duty – and the corresponding guidance – as applying to any harassment that might take place. What should employers do now?To help employers understand how to meet their obligations under the preventative duty, the EHRC has published an <a href="https://www.equalityhumanrights.com/employer-8-step-guide-preventing-sexual-harassment-work#step-7-dealing-with-harassment-by-third-parties" target="_blank">8-step guide</a>, which the EHRC suggests “should help [employers] take positive action to prevent and deal with sexual harassment at work”. <a href="https://www.acas.org.uk/sexual-harassment/steps-for-employers-to-prevent-sexual-harassment" target="_blank">Acas</a> has also recently updated its own guidance on sexual harassment in the workplace. We have summarised three key practical steps from Acas and the EHRC’s guidance below.1. Undertake a workplace audit and risk assessment – Understanding the workplace culture and environment is crucial to identifying factors that might increase the risk of sexual harassment and putting in place the necessary measures to prevent it. Employers should consider risks such as (i) the power imbalances that exist in the workplace; (ii) the nature and frequency of interactions with clients/customers/suppliers; (iii) the presence of alcohol; (iv) the existence and nature of crude or inappropriate ‘banter’ in the office; and (v) any out of hours/lone working or workplace socials. To understand the potential risks, employers could encourage staff to complete anonymous surveys and/or offer focus group discussions with an external facilitator. Once specific risks have been identified, this will guide employers towards the appropriate mitigating steps. Employers should remain proactive and look out for any “warning signs” that sexual harassment might be taking place (rather than simply waiting for complaints or concerns to be raised); regular audits are recommended.<a href="#top">Back To Top</a>2. Implement robust policies and procedures – Employers should ensure staff are aware of reporting mechanisms if they experience or witness sexual harassment. Equally, management must be aware of appropriate immediate action to take when receiving a report or complaint of sexual harassment. Companies should implement either a separate, standalone, sexual harassment policy or update the current equality and anti-harassment policy to clearly and expressly set out its policy and procedures in relation to sexual harassment. The policy should provide clear examples (which are not exhaustive) that illustrate sexual harassment in several scenarios, such as a work situation, work social events or on social media. Strategy documents setting out how the employer intends to tackle and prevent sexual harassment would also be sensible, to show employees that their employer is taking this new duty seriously and is committed to preventing sexual harassment in the workplace. Employers should regularly review and update their policies and procedures to properly address any risks or concerns that might be identified through ongoing audits.<a href="#top">Back To Top</a>3. Organise regular training – Employers should ensure that employees understand how to recognise harassment, what to do if they experience or witness it and how to handle complaints about harassment. Training should be tailored to the nature of the work and the target audience, taking into account any specific risks identified – preferably with separate training for employees in management roles. Specific training around third-party harassment should also be provided in industries where employees are more likely to work directly (and, in some cases, unsupervised) with third parties such as customers, clients or suppliers, and employers should provide specific training on how to address scenarios that could reasonably occur in their industry, such as verbal abuse in a call centre or physical abuse in a pub. Employers should keep training records and provide refresher training regularly.<a href="#top">Back To Top</a>What Next?The preventative duty represents an important shift in employers’ obligations to improve workplace culture by anticipating circumstances in which sexual harassment might happen and to take reasonable steps to prevent it. Employers should be taking action now to ensure they are able to satisfy their obligations by reviewing the available guidance and seeking advice on what changes to policies and procedures might be required.The government’s recently published Employment Rights Bill takes the preventative duty further, and will require employers to take “all reasonable steps” to prevent sexual harassment and third-party harassment in the workplace. Workers will continue to have the right to make a compensation claim for sexual harassment against their employer but, under the Bill, workers will also be able to bring a claim directly against their employer for failure to prevent third-party harassment (currently, only the EHRC has the power to enforce third-party harassment claims). Sexual harassment concerns will also automatically be considered a “protected disclosure” in the context of whistleblowing claims. Exactly how employers are expected to take “all reasonable steps” to prevent sexual harassment is unclear at present (the government will be consulting on this, and other aspects of the Bill, and so these changes are expected to come into force in 2026 at the earliest). It is clear, though, that putting processes in place to comply with the preventative duty will ensure that employers will be in a stronger position to meet their enhanced obligations under the Bill.<a href="#top" target="_self">Back To Top</a>Angela Utubor, London Trainee Solicitor, contributed to the drafting of this alert.

The “Preventative Duty”: New Law Places Active Duty on Employers in the UK to Prevent Sexual Harassment in the Workplace  

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Managing Partner, London

Annabel is a partner at Morrison Foerster and co-Managing Partner of the London office.

Annabel Gillham

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Of Counsel

Oliver Spratt is Of Counsel based in the London office of Morrison Foerster. 

Oliver Spratt

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The “Preventative Duty”: New Law Places Active Duty on Employers in the UK to Prevent Sexual Harassment in the Workplace

IS TIME UP FOR THE SEVERE OR PERVASIVE STANDARD? HARASSMENT CLAIMS IN 2020 AND BEYOND

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Employers in England, Scotland and Wales are now required to take reasonable steps to prevent sexual harassment of their employees in the course of their employment.

One of the difficult realities of running a business is that companies occasionally find themselves needing to make reductions to their staff headcount, be it because of workplace shutdowns due to economic difficulties, reorganizations, the need for synergy after acquisitions, or any number of other legitimate business reasons.As with any employee termination, termination processes that have the potential to impact multiple jobs need to be carefully prepared and carried out. Formalities under the law of the country in which affected employees are based need to be observed. In February 2023, we summarized the 10 <a href="https://www.mofo.com/resources/insights/230213-key-considerations-for-navigating-workforce-reductions" target="_blank">most important considerations for navigating workforce reductions</a> and pointed out that where employees outside the United States are affected additional complexities and obligations — and often considerably extended timeframes — arising under local laws may apply. Companies with an international workforce need to be aware that specific regulations—similar in principle, but often with different and sometimes more onerous practical requirements for employers, to the U.S. federal WARN law—for collective redundancies exist in Europe.In EU member states, these regulations are determined by the local legislation that implemented the 1998 European Collective Redundancies Directive (Directive 98/59) (the “Directive”). This alert sets out a brief reminder for companies with employees in EU member states of the key issues to be aware of when contemplating headcount reductions, along with an indication of how the implementing legislation works in Germany and the UK (where the previously existing collective redundancy legislation was amended in 2013, while the UK was an EU member state, to reflect the Directive’s implementation).The European Collective Redundancies DirectiveEU directives do not apply directly to employees and employers but are solely aimed at the member states. Each member state needs to implement a directive’s regulations into national law in order for them to become binding within the jurisdiction. A directive only sets out the minimum standards for local legislation, which means that member states can apply or introduce provisions that are more favorable to employees. Accordingly, there are variations across how each EU member state has implemented the Directive but many of the principles remain the same.Under the Directive, a dismissal is any termination of employment initiated by the employer for one or more reasons not related to the employee concerned. Thus, it includes not only a termination notice handed over by the employer, but also the conclusion of a settlement/termination agreement if initiated by the employer. In other words, even where an employee opts for voluntary redundancy—in a situation where a company looking to reduce headcount offers enhanced exit benefits if employees agree to leave voluntarily—this would still be deemed a dismissal under the Directive and respective national laws and, therefore, will count towards the “collective” dismissal threshold (see more below).The Directive sets out the following key elements to collective redundancy:<ul dir="ltr"><li dir="ltr">Threshold: The Directive provides two options for the threshold for the number of notices of termination that need to be issued within a certain time period in order for the proposed redundancies to amount to a collective redundancy. Each individual member state had the discretion to choose which of the two alternatives to implement into national law. The relevant thresholds options under the Directive were:</li><ul><li dir="ltr">Option 1: within a 30-day period, notice of termination issued to: </li><ul><li dir="ltr">at least 10 employees in establishments where between 21 and 99 employees are employed;</li><li dir="ltr">at least 10% of the employees in establishments where between 100 and 299 employees are employed; and</li><li dir="ltr">at least 30 employees in establishments where 300 or more employees are employed; OR</li></ul><li dir="ltr">Option 2: within a 90-day period, notice of termination issued to at least 20 employees regardless of the number of employees employed at the establishments in question.</li></ul></ul>Note that the Directive refers to “establishments” and not the total number of employees employed by a company/employer. For the purposes of the collective redundancy threshold, redundancies are counted on a per establishment basis meaning that redundancies by employers with multiple establishments (e.g., multiple plants or offices) will not necessarily trigger a collective process where impacted employees are spread across different establishments.<ul><li>Consultation with employee representatives, if any: Where a company is contemplating collective redundancies, the employer needs to consult with employee representatives, to the extent any exist, beforehand with a view to reaching an agreement. During the consultation, the Directive requires the parties to discuss whether and how collective redundancies can be avoided, or if the number of affected workers can be reduced and if there are any ways to mitigate the consequences for the employees. In order to enable the employee representatives to effectively engage in this consultation, the employer is obliged to provide the representatives with certain information regarding the rationale and process for the redundancies. Where there are no pre‑existing elected employee representatives, the Directive does not require the election of new representatives specifically for this consultation.</li><li>Notification to a competent public authority: In most situations, employers are obliged to notify the relevant competent public authority in the jurisdiction in writing in advance of any proposed collective redundancies. The notification shall contain all relevant information concerning the collective redundancies and the consultations with employee representatives along with a copy of the consultation and, similarly, a copy of the notification to the relevant authority must also be shared with the employee representatives, if any.</li><li>Effective date of terminations: The terminations cannot take effect until at least 30 days after the notification to the competent public authority described above.</li></ul><ul><li>Consequences for non-compliance: Each member state must implement laws to ensure that employee representatives and/or employees are able to enforce the obligations either by judicial and/or administrative procedures. However, the Directive does not detail any specific penalties or consequences for non-compliance with any aspects of the collective process. Accordingly, it was up to the member states to decide whether non-compliance with a procedural step could impact the validity of the redundancies as well as, or instead of, penalties on the employer for failure to follow the proper collective redundancy process.</li></ul>How did Germany implement the Directive?Germany opted for the 30-day period alternative but determined different, in effect lower, thresholds for what would constitute a collective redundancy meaning that a collective process could be triggered in Germany where it wouldn’t be the case in another EU member state even though the same number of employees were impacted. Employers with employees in Germany need to have the following thresholds in mind, depending on the size of the business in Germany, when contemplating collective redundancies:<ul><li>more than five employees in establishments with between 21 and 59 employees;</li><li>10% of the regularly employed employees or more than 25 employees in establishments between 60 and 499 employees; or</li><li>at least 30 employees in establishments with 500 or more employees.</li></ul>In addition to the comprehensive information and consultation obligations set out in the Directive, under German law collective redundancies may trigger additional works council rights. Depending on the size of the establishment, the implementation of collective redundancies could be deemed to be an “operational change”. As a result, the company would be obliged to negotiate and agree with the works council on measures to mitigate the economic consequences for the employees. This process can take up to six months (sometimes even longer) depending on the circumstances and needs to be completed before any redundancies can take effect.Interestingly, the German implementing legislation did not set out any sanctions or consequences for non-compliance with any aspect of the information, consultation or notification process. However, German labor courts filled this silence. Up until recently, the view of the labor courts was that the correct, timely, and complete collective redundancies notification to the German employment agency (the competent public authority in Germany) and the prior information and consultation process with the works council were mandatory steps for a dismissal to be effective. If an individual employee challenging their termination filed a protection against dismissal lawsuit, the burden was on the employer to prove that the notification was correctly filed and met all standards and requirements. This added another layer to the preparation process, and in many cases a termination was held invalid by labor courts because of mistakes made in connection with the collective redundancies notification.However, the importance of these procedural steps may be about to change. Following a ruling of the European Court of Justice (the “ECJ”), a chamber of the German Federal Labor Court (the highest labor court in Germany) announced in December 2023 that it intends to change its position that a termination is deemed to be invalid solely as a result of a failure to properly notify the unemployment agency. It remains to be seen whether the highest labor court in Germany will in fact abandon its previous case law and allow dismissals to take effect even where certain procedural formalities have not been complied with. If it does, German lawmakers may look to take action and instead implement an alternative sanction for non-compliance with the full collective process. We will continue to monitor these developments.Is the collective redundancies process different in the UK?In short, yes. Although it is worth noting that the UK’s approach to collective redundancies remains broadly unchanged from when the Directive was first implemented into English law through a 2013 Order amending the Trade Union and Labor Relations (Consolidation) Act 1992 (“TULCRA”). In simple terms, TULCRA requires employers who are proposing to dismiss 20 or more employees at one establishment within a period of 90 days or less to inform and consult with elected employee representatives. Minimum periods for consultation apply before the first dismissal can take effect: 30 days where fewer than 100 redundancies are proposed at a single establishment and 45 days where 100 or more redundancies are proposed. The same periods, 30 and 45 days respectively, broadly apply to the advance notice required to be given to the UK Secretary of State (the relevant competent public authority for this purpose).There are various ways in which TULCRA diverges from the Directive, but the most notable are the phrase “redundancies proposed”, which is said to allow for consultation to start at a later date than the Directive’s “contemplated” language, and the requirement for redundancies to be at one establishment to meet the 90-day threshold, whereas the Directive’s second limb option spanned dismissals over a 90‑day period across establishments. Unlike in Germany, it is not the case that a dismissal would be deemed ineffective where one of the procedural steps required by TULCRA has not been followed. Instead, employees could seek to bring claims for unfair dismissal and/or failure to comply with the obligation to consult, both of which carry the potential for significant financial awards. The specific penalty for failing to provide the required advanced notice to the Secretary of State in the prescribed “Form HR1” carries an entirely separate penalty—failure to notify the Secretary of State is a criminal offence with potential criminal liability for both the employer and the individuals involved. See our recent article in the <a href="https://restructuring.mofo.com/topics/the-administrator-an-officer-of-the-company-" target="_blank">MoFo Restructuring Round-Up</a> on this potential liability.This alert provides a small flavor of the types of variations that exist when dealing with multiple employee dismissals in just two European jurisdictions. In other European countries the processes required can be more onerous and the potential risks greater. We strongly recommend employers seek local law advice as soon as they determine any possibility of redundancies or other dismissals as the pitfalls of getting the process wrong can be grave.

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Associate

Lara Sirimanne is an associate in the London employment practice of Morrison & Foerster. She advises domestic and international clients on the full spectrum of both contentious and non-contentious emp

Lara M. King

Lara King

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Senior Associate

Christin is a senior associate at Morrison & Foerster’s German office in Berlin and is a member of the Employment & Labor practice group. She advises national and international companies on all issues

Christin Dunkel

Christin is a senior associate at Morrison & Foerster’s German office in Berlin and is a member of the Employment & Labor practice group. She advises national and international companies on all issues and disputes arising under labor law.

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For more than two decades, Hanno has advised and represented leading domestic and international corporations in a wide variety of industries, including technology, consumer products, automotive, and 

Hanno Timner

Hanno Timner is a partner in the Berlin office and head of the Employment and Labor practice group in Germany. He advises and represents national and international employers in all labor law issues and disputes.

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One of the difficult realities of running a business is that companies occasionally find themselves needing to make reductions to their staff headcount, be it because of workplace shutdowns due to economic difficulties, reorganizations, the need for synergy after acquisitions, or any number of other legitimate business reasons.

Collective redundancies in Europe

The German Whistleblowing Act (the “Act”) requires all legal entities in the private sector with at least 50 “workers” to set up internal reporting channels for whistleblowers. Since the Act does not specify that this number refers to full-time equivalents (FTE), it is likely that this threshold refers to the total headcount of employees, so companies should also take part-time employees fully into account when evaluating if they fall under the scope of the Act. Note that the term “workers” not only includes regular employees, but also executive employees, fixed-term employees, interns, and trainees.Read the <a href="https://www.mofo.com/resources/insights/230602-the-new-german-whistleblowing-act" target="_self">client alert</a>.

What You Need to Know About the New German Whistleblowing Act

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Jasmin advises national and international companies on all data protection issues as well as all disputes and questions arising under labor law.
Jasmin studied law at the Humboldt-Universität zu Berli

Jasmin Dajana Kuehner

Jasmin Kuehner

What You Need to Know About the New German Whistleblowing Act

The German Whistleblowing Act (the “Act”) requires all legal entities in the private sector with at least 50 “workers” to set up internal reporting channels for whistleblowers.

Following the enactment of the Directive on Transparent and Predictable Working Conditions (the “Directive”), EU Member States have had to implement into their national laws additional information obligations on employers. The deadline for the transposition of the Directive into national law was August 1, 2022. The Directive extends existing provisions based on a former EU directive and broadly follows the UK regime, which has itself broadened in scope in recent years. To avoid falling foul of these new and expanded requirements—which could result in substantial fines—companies with employees across the EU and the UK should review their existing employment contract templates for new hires and take steps to provide all required information to existing employees, whilst also taking into account any “special rules” that might apply in a particular country.I. How does the Directive impact employers with EU-based employees?Extended content requirementsEmployers are required to provide their employees based in the EU with information on the essential terms and conditions of their employment relationship. Whilst this is not a new concept—similar requirements have been in place under a former EU directive since 1991—and it was always common practice throughout the EU to provide employees with an employment agreement containing the key terms of their employment (such as remuneration, working hours, position, etc.), the Directive transforms this practice into a mandatory and publishable obligation, by obliging EU Member States to prescribe penalities for breaches of the information obligations. In addition, the catalogue of terms to be provided (set out in full at the end of this article) includes information that has not traditionally formed part of contract templates in the EU.These changes affect not only new employment relationships, but also existing employees. Employers are now required to fulfill the information obligations and provide all new employees with a document containing the necessary information, and existing employees are entitled to receive a summary of their essential working conditions upon their request.New mandatory deadlinesThe Directive stipulates different deadlines within which employers need to provide the relevant information to their employees. The most essential terms, such as the identity of the contractual parties, remuneration, and working hours, must be provided within the first seven days of employment. The remaining terms (described below) should be communicated within the first month. In Germany, some information, such as the employer’s (legal) name and address, the remuneration, and the agreed-upon working hours, even must be provided by the first day of employment at the latest. Employers should adhere to the shortest deadline, as set out in the applicable law of the relevant Member State. In Germany, each infringement of the information obligations, including a delayed handover, is considered an administrative offense that can be punished with a fine up to EUR 2,000 per case (i.e., per employee).Form of informationThe Directive requires the information to be provided in writing, either on paper or in electronic form. If an employer chooses electronic form, the employee must be able to store and print the document, and the employer should receive a proof of transmission. This information is usually provided in the form of an employment agreement. Typically, most of the information prescribed by the Directive is already included within employment contracts and employers will need only update their template documents to include all necessary information. No separate notice is required.Special aspects in GermanyIn Germany, the information obligations prescribed by the Directive are laid down in the Act on Notification of Employment Conditions (Nachweisgesetz). In contrast to the Directive, the German legislation does not allow for electronic signatures to be used within employment contracts. Thus, strict formal requirements apply: employment contracts must be signed by an authorized person and physically handed out to the employee. Signatures must be in wet-ink; the signing of the employment contract via DocuSign, or provision of a scanned copy of the signed agreement to an employee, will not meet Germany’s legal requirements.Any non-compliance with these requirements can be punished with a fine of up to EUR 2,000 per contract. Consequently, companies with larger workforces could be fined huge amounts if they systematically fail to comply with these requirements.II. What about in the UK?Under UK employment law, employers of UK-based employees have been subject to a longstanding requirement to provide written statements of key employment terms to their employees. It has been mandatory to do so for all employees starting work on or after 30 November 1993. Certain terms, those considered most important, must be provided to employees in a single document; these are detailed in section 1 of the UK Employment Rights Act 1996 (the “ERA 1996”) and usually provided to employees in the form of an employment contract. The ERA 1996 provides that other mandatory terms must also be provided in writing, but the details can be set out in supplementary documents, e.g., in a handbook or standalone policies. Written statements can be provided in electronic or paper form and wet-ink or electronic signature is acceptable.Following a review of employment practices in the UK, the government proposed a package of workplace reforms as part of its “Good Work Plan” to increase the transparency between workers and employers and improve the enforcement of employment rights. A key element of the Good Work Plan reforms was ensuring that companies be transparent with contingent and gig-economy workers who do not enjoy the full protection of UK employment laws.<a href="#_ftn1" target="_self" id="_ftnref1">[1]</a> New legislation, which came into force on April 6, 2020, was enacted to implement the reforms proposed by the Good Work Plan, which expanded the scope of the requirement to provide a section 1 statement of terms to give all workers the right to receive a written statement setting out the basic terms of employment, a right previously only available to employees.The new legislation also further amended the requirements under the ERA 1996 so that written statements must now be provided on or before the individual’s first date of employment, rather than within two months of their start date, as previously required, and the scope of the written statement has also been expanded. For example, employers are now required to list, within the primary written statement, all paid leave to which the employee is entitled and all benefits; previously, these items would appear in supplementary documents.Where an employer does not comply with any of the provisions, the employee or worker can bring a claim to the employment tribunal at any time during the period of their employment or engagement, or within three months of termination. If a claim on the above provisions is brought in conjunction with another successful substantive claim, the tribunal is obliged to award the employee or worker a minimum of two weeks’ pay, unless it would be unjust or inequitable to do so (and the award can be up to four weeks’ pay if the tribunal sees fit). It is worth noting, however, that the risks attaching to failure to fully comply with the requirements on written statements of employment terms are low in practice as, absent another substantive claim (e.g., for discrimination or unfair dismissal), the most a tribunal would do would be to ask that the relevant particulars be clarified.III. What practical steps should employers of EU-based employees be taking in light of the Directive?<ul><li>Review and—if necessary—update existing employment contract templates for new hires to include all mandatory terms and conditions;</li><li>Prepare a notice for existing employees to be able to provide them with a summary of the employment conditions without delay;</li><li>Ensure that processes are in place to respond to any statutory requests from employees; and</li><li>Check who needs to be authorized to sign employment agreements and other notices to limit any delay.</li></ul>IV. What are the “mandatory” details that companies must provide to their workforce (in a single or ‘primary’ written statement)?These terms are mandatory for both the UK and the EU:<ul><li>identities of the contractual parties;</li><li>place of work;</li><li>title or a brief description of the work;</li><li>commencement date of the employment or engagement;</li><li>for fixed-term employment relationships: the end date or the expected duration;</li><li>duration and conditions of the probationary period;</li><li>if applicable, the training entitlement provided by the employer;</li><li>amount and nature of paid leave, including holiday leave;</li><li>termination procedure, including the formal requirements, notice periods, and (in some countries) time limits for bringing a lawsuit before the labor court;</li><li>remuneration (base salary and any other compensation);</li><li>length of the worker’s standard working day or week and arrangements for overtime and its remuneration;</li><li>any collective agreements governing the conditions of work;</li><li>except for in the UK, where it is the responsibility of the employer, the identity of the social security institutions receiving the social contributions;</li><li>where the employee or worker will be required to work outside the country of work for a period of one month or more: the period for which they will work outside their country of work, the currency of pay, and any additional remuneration or benefits; and</li><li>additional details in the event that there is a contracting out certificate in force in respect of the employment or any labor leading arrangements apply.</li></ul>For the UK, the following additional terms are also mandatory:<ul><li>terms and conditions relating to holiday entitlement (including public holidays) and holiday pay (sufficiently detailed so that entitlement on termination can be calculated); and</li><li>days of the week required to be worked, whether working hours are variable, and how any variation will be determined.</li></ul>Further, the following terms are mandatory in the UK, but may be provided for in a separate, reasonably accessible policy document so long as they are referenced in the single statement:<ul><li>terms and conditions relating to pension and pension schemes;</li><li>terms and conditions relating to sickness, incapacity, and sick pay;</li><li>disciplinary rules applicable and the disciplinary procedure;</li><li>person to whom the employee or worker should appeal against disciplinary and grievance decisions and the procedure to be followed; and</li><li>any non-compulsory training entitlement</li></ul>Please note that national laws of EU member states may vary with regards to other required terms, so this list must be compared and, if necessary, adjusted to be compliant with the relevant national law.<a href="#_ftnref1" target="_self" id="_ftn1">[1]</a> There are broadly three categories of employment status under UK employment law: employee, worker, and independent contractor. Workers are defined as those with a contract (express or implied) who undertake to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual. In short, personal service is a key element of being a worker; the services cannot be performed by a substitute, unlike with independent contractors. Employees have full statutory employment protection, workers are entitled to some statutory employment protections but not all, and, at the end of the spectrum, independent contractors are treated as commercial parties with no statutory employment rights.

New Requirements for Employment Agreements in Europe

Following the enactment of the Directive on Transparent and Predictable Working Conditions (the “Directive”), EU Member States have had to implement into their national laws additional information obligations on employers. The deadline for the transposition of the Directive into national law was August 1, 2022. 

New Requirements for Employment Agreements in Europe

When your organization is searching to fill a new position, you understandably want to find out as much as possible about the candidates who apply. Aside from determining whether the candidate has the specific skill set, education, and experience necessary to do the job, you want to make sure that the person will fit in with the team. Do they have a positive attitude and integrity? Are they flexible and hard working? Are they a good communicator and team player? Are they dependable and creative? If possible, you want to hear from references provided by the candidate to confirm that the candidate was sincere and meets your organization’s needs. You might even want to check how they behave on the Internet.It is difficult to figure all of this out through the traditional hiring process, so many companies resort to seeking additional information from the candidate him or herself and by conducting extensive background checks that might even include reviewing the candidate’s social media accounts.The nature of personal information that an organization may collect during the hiring process is, however, quite limited due to the EU General Data Protection regulation (GDPR), the implementing laws of the EU Member States and emerging U.S. laws. Here are seven tips for your international recruiting programs.Read our <a href="https://www.mofo.com/resources/insights/201030-international-recruiting-programs.html" target="_blank">client alert.</a> For more insights about privacy + data security, please visit our <a href="https://www.mofo.com/special-content/gdpr-resource-center/" target="_blank">GDPR Resource Center</a> and <a href="https://www.mofo.com/special-content/california-consumer-privacy-act/" target="_blank">California Consumer Privacy Act Resource Center</a>.

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Clients seek Alja for her no-nonsense approach to resolving complex local legal issues efficiently while providing strong representation for their most important privacy, whistleblowing, and investigatory matters. Alja is the go-to counsel for EU whistleblowing laws and leads strategy for the firms’ advisory efforts for compliance with whistleblowing rules and procedures globally. 

Alja Poler De Zwart

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Marian Waldmann Agarwal is a partner in the Privacy + Data Security Group at Morrison Foerster. She also co-leads the firm’s Artificial Intelligence Group and is a member of the global Environmental, Social, and Governance (ESG) Steering Committee.

Marian Waldmann Agarwal

Marian A. Waldmann Agarwal

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7 Tips for International Recruiting Programs in the Era of GDPR and Emerging U.S. Laws

7 Tips for International Recruiting Programs in the Era of GDPR and Emerging U.S. Laws

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When your organization is searching to fill a new position, you understandably want to find out as much as possible about the candidates who apply. Aside from d

On November 26, 2019 the Official Journal of the European Union published the European Whistleblowing Directive (“the Directive”). This means that EU member states must now implement the Directive into national law, and companies employing 250 or more workers must be in compliance with the Directive by December 17, 2021. However, companies in the private sector with 50 to 249 workers will have until December 17, 2023 to comply with the Directive and establish internal reporting channels as required under Article 8(3).It is worth noting that the Directive does not specify whether the appropriate thresholds apply only to workers physically located in the EU. That said, in our view, a reasonable interpretation of the Directive would lead to the conclusion that any legal entity based or headquartered in the EU that employs 50 or more workers globally, regardless of the physical locations of those workers, would need to comply with the Directive. In the case of legal entities that are not based or headquartered in the EU, our view is that such entities that employ 50 or more workers located in the EU would fall under the scope of the Directive. This is because almost all EU statutory instruments related to worker protection apply to workers located in the EU and disregard the location of their employer’s head office. In other words, a company with its head office in Brazil employing 50 workers in France would likely be covered by the Directive’s scope. We hope that EU Member States will provide additional clarity on this point once they implement the Directive within their domestic legislation. To find out more about the Directive and what it means for your organization, please visit the original article <a href="https://elc.mofo.com/topics/european-whistleblowing-directive-what-you-should-know.html">here</a>.Morrison & Foerster trainee solicitor Tom Macintosh Zheng contributed to the writing of this post.

Update: The European Whistleblowing Directive: What You Should Know

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Update: The European Whistleblowing Directive: What You Should Know

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On November 26, 2019 the Official Journal of the European Union published the European Whistleblowing Directive (“the Directive”). This means that EU member sta

Until now, there has been no baseline regime for the protection of whistleblowers in the European Union (“EU”). Member state legislation in this area is largely fragmented and, in many cases, does not provide much (if any) protection for whistleblowers. Presently, only 10 out of the 28 member states have comprehensive legislation protecting whistleblowers, while the remaining 18 member states only offer limited protection within specific sectors.[1] The notion of introducing a uniform regime has been on the cards for some years, but in the wake of recent scandals such as the Panama Papers, Luxleaks, and Cambridge Analytica, all of which were brought to the world’s attention by whistleblowers, this has moved to the top of the agenda. The European Parliament and the European Council have now formally adopted and ratified the Whistleblowing Directive (“the Directive”) with effect from October 7, 2019.In this Commentary, we provide an overview of the Directive, briefly compare the Directive to the current legal position in Germany and the UK, and explain how its implementation will impact organizations with employees in the European Union.What Is a “Directive”?A directive is a legal instrument approved by the EU legislature, which, in general, requires implementation into local law by individual EU member states before it becomes effective. Directives often carry an overarching objective and allow member states to select the means by which they achieve the objective. This means that the local laws implementing a directive will differ between member states.The Directive: General OverviewAs noted, the Directive lays the foundation for EU-wide protection of whistleblowers at work and sets EU-wide standards for both public and private companies to (i) respond to concerns raised by whistleblowers and (ii) ensure adequate protection against retaliation. The Directive is likely to be published in the EU’s Official Journal in November 2019, meaning that EU member states will have to implement local laws giving effect to the Directive by no later than November 2021. If a member state fails to implement the Directive by the imposed deadline, then the European Commission may ask the court to impose fines on the infringing member state.Who will be protected under the Directive? The Directive protects whistleblowers working in the private or public sector who acquired information on breaches of EU law in a work-related context (“Whistleblowers”). The term “work-related” is, however, broadly defined and refers to current and former employees, as well as to shareholders, interns, job applicants, paid or unpaid trainees, and employees of contractors and subcontractors.In order to be protected under the Directive, the individual must simply have reasonable grounds to believe that the information reported is accurate. Other concerns, such as the individual’s motive or the public interest, are irrelevant in deciding whether the individual receives protection under the Directive.What types of breaches can Whistleblowers report?The Directive’s scope of application is currently limited to reports relating to breaches and abuse of EU law. However, member states can broaden this scope, and, in any event, for member states that do not currently have sufficient whistleblower protection laws (e.g., Germany), the Directive will still enhance the level of protection afforded to Whistleblowers.How do Whistleblowers make a report under the Directive?The Directive stipulates three possible stages for reporting to a breach:<ul><li>Stage 1 – Internal Reporting: The Directive encourages member states to require individuals to raise concerns to their employers internally, before using other channels of reporting. The Directive also requires that the employer must acknowledge receipt of the complaint within seven days, and must then respond substantively to the complaint within three months of receipt.</li></ul><ul><li>Stage 2 – Reporting to National or EU Authorities: While Whistleblowers should be encouraged to follow internal reporting procedures in the first instance, Whistleblowers may bypass Stage 1 and report directly to national or EU authorities. For example, if (in breach of the Directive) an employer does not have an internal reporting mechanism or if the Whistleblower believes that internal reporting may endanger or jeopardize future investigations, then the employee has the right to report any issues directly to a “competent authority,” either nationally or at EU level. (It is not clear under the Directive what would amount to a “competent authority.”)[2]</li></ul><ul><li>Stage 3 – Public Disclosure: If both Stage 1 and Stage 2 do not “function properly,” [3] or if the Whistleblower has reasonable grounds to believe that there is an “imminent danger to the public interest,” then the employee has the right to disclose the issue directly to the public via any media channels. </li></ul>Organizations must provide a mechanism for Whistleblowers to be able to raise concerns. This could be through either a written or oral report, and organizations must allow Whistleblowers an opportunity for an in-person meeting with a “responsible person” within the organization to discuss their concerns. Organizations are also required to designate a person or a department responsible for following up on reports and establishing procedures and guidelines on the follow-up process and must publicize these procedures to the workforce.How will Whistleblowers be protected under the Directive?The Directive increases the burden on employers and strengthens the protections afforded to Whistleblowers. It does so by:(a) requiring organizations with 50 or more workers to introduce internal channels and procedures for whistleblowing (see “How do Whistleblowers make a report under the Directive?”);(b) expanding the scope of individuals protected by whistleblowing laws (see “Who will be protected under the Directive?”); (c) protecting Whistleblowers from civil liability (for example, claims for breach of confidence or defamation), provided the Whistleblower can demonstrate that they have “reasonable grounds” for their actions;(d) introducing legal aid for Whistleblowers in certain circumstances;(e) banning all forms of retaliation in the workplace against a Whistleblower, which would include suspension, dismissal, demotion, harassment, and/or discrimination; and(f) requiring member states to ensure that Whistleblowers have access to free advice in the event that they suffer retaliation.However, it is worth noting that, unlike the position in the United States, the Directive does not provide for the offer of financial incentives for Whistleblowers.What are the consequences of failing to comply with the requirements set out in the Directive?The Directive requires member states to establish “effective, proportionate and dissuasive penalties”[4] against any organizations that attempt to hinder reporting or to take retaliatory measures against Whistleblowers. Aside from these financial penalties, failing to implement the correct procedures or taking retaliation against a Whistleblower will likely have a negative impact on the organization’s reputation.The Directive and Existing German LawIn Germany, no comprehensive legal framework on the protection of Whistleblowers, reporting mechanisms, and protection against retaliation currently exist. While limited whistleblower protection exists for workers within the financial services industry and for employees raising health and safety concerns at work, the Directive will mark a significant change to current domestic law – and the protection of whistleblowers – in Germany.The Directive and Existing UK LawUnlike in Germany, the UK has, through the Public Interest Disclosure Act 1998, implemented wide-ranging protections for Whistleblowers in the workplace, many of which mirror the requirements of the Directive. Currently, dismissing an employee for making a “protected disclosure” amounts to automatic unfair dismissal, and workers are protected from suffering a “detriment” as a result of making a protected disclosure. Additionally, employers found to have subjected a Whistleblower to a detriment face potentially uncapped damages.Nonetheless, the Directive will (if implemented in the UK), enhance protections currently afforded to Whistleblowers, particularly in relation to the requirement to establish internal channels and procedures for whistleblowing and the introduction of legal aid in certain circumstances. (See “How will Whistleblowers be protected under the Directive?”)Will the UK Incorporate the Directive into Domestic Law?Given the general uncertainty surrounding Brexit at the time of writing, it is unclear whether the UK will incorporate the Directive into domestic law. The government has not yet confirmed that it plans to bring the Directive into domestic law if a “no deal” Brexit occurs. That said, prominent charities aimed at promoting and protecting Whistleblowers in the UK, such as “Protect,” have lobbied the government to adopt the Directive irrespective of the type of Brexit that may occur, so it is possible that something akin to the Directive might be introduced into UK legislation after Brexit. In the words of Protect, if the UK leaves the EU, the Directive “may prove to be the first test as to whether the UK keeps up with the EU’s levels of protection, or allows its workers to fall behind.”[5] Conclusion – What to do now?During the next two years, member states will start implementing the Directive into national law, and companies employing 250 or more workers should be in compliance with these laws by November 2021. However, medium-sized companies, which employ more than 50 but less than 250 workers, should comply by November 2023. Nevertheless, all companies should monitor the lawmakers in those member states where they have offices and employees and should slowly begin their implementation of the requirements under the Directive. If a whistleblowing system already exists, companies should review, adjust, and update these procedures accordingly. If not, they must implement reporting channels and procedures that fulfill the requirements under the Directive.Morrison & Foerster trainee solicitor Tom Macintosh Zheng has contributed to the writing of this post. [1] Strengthening whistleblower protection at EU level: European Economic and Social Committee<a href="https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/strengthening-whistleblower-protection-eu-level">https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/strengthening-whistleblower-protection-eu-level</a>[2] Article 11(1) Directive on the protection of persons who report breaches of Union law[3] (62) Directive on the protection of persons who report breaches of Union law[4] Article 23(1) Directive on the protection of persons who report breaches of Union law[5] EU Directive on Whistleblowing: Protect - <a href="https://protect-advice.org.uk/eu-directive-on-whistleblowing/">https://protect-advice.org.uk/eu-directive-on-whistleblowing/</a>

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The European Whistleblowing Directive: What You Should Know

The European Whistleblowing Directive: What You Should Know

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Until now, there has been no baseline regime for the protection of whistleblowers in the European Union (“EU”). Member state legislation in this area is largely